Local refinery workers ask for help from the White House

On Thursday, Ryan O’Callaghan, president of the United Steelworkers Union Local 10-1, told President Donald Trump his help is desperately needed.

O’Callaghan joined executives from Monroe Energy, Philadelphia Energy Solutions and Valero, as well as ethanol industry representatives and U.S. Sens. Pat Toomey, R-Pa., Ted Cruz, R-Texas, Chuck Grassley, R-Iowa and Joni Ernst, R-Iowa, in talking with Trump and Vice President Mike Pence for about an hour about Renewable Identification Numbers. RINs are credits purchased to satisfy the federal mandate for ethanol in gasoline.

In January, Philadelphia Energy Solutions, where USW 10-1 represents about 600 employees, announced a restructuring that included a Chapter 11 bankruptcy filing and company officials said it was needed because of the spiraling costs of these RINs.

On Thursday, O’Callaghan and refinery officials took their case to the White House, as did members of the agricultural community.

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“I kept reminding the president that if PES folds, it’s 28,000 jobs that are related,” the union president said, adding that he also said if all of the area refineries fold, it would equate to 60,000 jobs.

He said Trump told him, “I hear you, Ryan, I got you.”

Cherice Corley, public affairs and communications director for Philadelphia Energy Solutions, declined to comment on the meeting.

O’Callaghan said the administration was working on a deal for both groups that would raise the ethanol to 15 percent blend, rather than 10 percent blend while putting a cap on the RINs cost for two years to give merchant refiners like PES a chance to become financially stable.

“I told the president that the 28,000 families that rely on employment at PES don’t have time,” O’Callaghan said.

He said the president responded, “He said, ‘Be back here next week.’”

Toomey and Cruz issued a statement after the meeting.

It read: “We are encouraged that President Trump recognizes the importance of providing relief from crushing RINs costs and expanding the potential market for ethanol that will benefit both Iowa farmers by letting them sell more corn and blue-collar refinery workers by saving their jobs in states including Pennsylvania and Texas, and are grateful for the commitment he’s displayed to continue talks that will result in a win-win for both parties.

“We had a productive meeting today with Senators on both sides, along with representatives from the unions, ethanol and refining industries and motor fuel retailers,” it continued. “We are making real progress, and with the President’s leadership, we believe we can and will ultimately solve the problem.”

When PES first began operating at the South Philadelphia facility in 2012, RINs cost 5 to 6 cents. Since then, the refiner has spent $832 million on securing them, making it the company’s largest expense after crude oil. In 2017, PES spent about $218 million on purchasing RINs or more than twice the company’s payroll, nearly 1.5 times its average annual capital expenditures and about four times its interest expense.

Last month, Cruz visited Philadelphia Energy Solutions as he listened to company and union officials ask to have the regulation system fixed while mostly farming advocates linked the company’s problems more to corporate profits.

At the time Bob Dinneen, president and CEO of the Renewable Fuels Association, said capping RIN prices would hurt farming jobs and that the PES situation is “corporate greed, because that’s what’s really at the heart of PES’ financial problems.”

PES officials have said that assertion is incorrect.

But, now a reprieve may be on the way.

“I think it went well,” O’Callaghan said after his presidential meeting. “The president is pretty involved in it. He’s had two meetings in two weeks about the issue. He’s trying to get these parties together to get a deal. He wants to protect the manufacturing jobs in the refinery. He doesn’t want to harm the farmers. He wants a meeting next week. I think it’s great that we actually have the president personally involved with trying to protect refinery worker jobs.”

He said he greatly appreciated the White House support.

“There’s no leverage for the merchant refiners except that leverage from the president personally,” O’Callaghan said. “The needle has moved ... Our lives are dependent on this.”